Tuesday, August 23, 2011

Painful Lessons At Charlotte’s Expense

It’s been painful and sad but not very surprising to witness the tragedy that has unfolded in Charlotte, North Carolina over the last year.

Community/destination marketing organization (DMO) executives there should have known better but the full story is merely masked by scapegoating an individual, throwing him “under the bus” or reassigning him and then adding another layer of management, probably along with a good amount of micro-managing.

The Charlotte Regional Visitor Authority (CRVA) is the umbrella organization created to essentially strap Charlotte’s DMO, Visit Charlotte, down with the operation of several mega-facilities there.

Some well-intended executives fell down an extremely slippery slope; but as one blogger notes, it is only symptomatic of a broader community culture that includes other downtown and business-related organizations.

Hopefully that community’s newspaper will keep digging and revealing until it makes fully transparent the entire toxic cocktail of hubris, envy, and special interest pressure at the root of this problem which has become embedded in the nature of so many communities and which ensnared CRVA.

This should also be a warning to many other communities including several others in this state that are similarly addicted to a blend of mega-facilities, mega-events and the so-called business development funds or subsidies and kickbacks required to sustain them. Those where local news media are complicit or complacent and choosing to sit back and relish in Charlotte’s drama, would be better served by real scrutiny such as that exhibited by the Charlotte paper.

Obsession by many cities with mega-facilities and mega-groups all begins, when in the immortal words of Charles Dickens, a city’s “nosiest authorities insist on being received, for good or for evil, in the superlative degree of comparison only.”

A Raleigh scribe once coined the term Charlotte-envy to describe that condition in his community. It was noted in turn that Charlotte has Atlanta-envy, and Atlanta…well you see the drill and the condition certainly isn’t limited to just these three communities.

Even communities such as my adopted hometown of Durham aren’t immune just because it has a stronger and more outspoken commitment to being genuine and authentic and focus on building on a strong sense of place and the evolution of place-based assets rather than worrying about replicating other communities.

During my now-concluded four-decade career and especially during the two as Durham’s DMO exec, I was fortunate to be insulated by a prudent legislated directive to market the community as a whole: a policy stating that facilities and events should be market-driven not ego-driven, and another prohibiting a focus on the thin slice of external events where subsides or underwriting are required to “buy the business.”

That didn’t prevent special interests and even a few public officials from attempting to corner me from time to time. At first the pressure was only from nearby Raleigh interests or sycophants when, from time tome, that community would go “big game hunting” and then try to guilt-trip or corner Durham into betraying its well publicized policies.

But the pressure later came from a handful of Durham-related interests including government or development officials who would frequently try to corner me into underwriting a pet event or to make decisions based only on “who’s asking” or to redirect marketing to favor one facility over the community-at-large or on more than one occasion to “enhance” economic impact estimates to be more impressive just as it appears to have happened in Charlotte.

They were never successful but the pressure was unrelenting and “but for the grace of God,” I too could have fallen into or been drug into the same trap as my counterparts in many other communities.

From statements in the news media and in an internal audit it appears Charlotte may have felt pressured to exaggerate projected attendance at the NASCAR Hall of Fame which may in reality only be half of what was projected. The shortfall appears to be in the anticipated one-third from resident attendance within 50 miles of the facility.

From personal observations during many visits to Charlotte, on many Saturday’s one can shoot a cannon through the community’s museums and sports venues and not hit anyone, not to mention find a restaurant that is open at lunchtime. It is a classic case of supply has outstripping demand and as a New York Times headline once read, “Build It And They Will Come - but Not For Long.”

Ironically, that NASCAR facility is one of the mega-facilities in Charlotte to be truly place-based. While Charlotte isn’t home to a NASCAR race or a speedway, it is very close to several other communities where race teams are based as well as to the town of Concord, North Carolina which is the true physical location of a NASCAR raceway and several race events including those at the so-called Charlotte Motor Speedway.

Charlotte is also the largest city in the state where much of NASCAR’s storied past is anchored.

I suspect it was while investigating the dramatic attendance shortfall at the Hall of Fame that reporters were able to spot that part of the public underwriting (state and local) provided to land and produce the CIAA basketball tournament had been kicked back to the DMO as a bonus for the event’s planner who also worked there.

The pressure to do something like that can be very subtle and veiled and entitled but nonetheless intense.

I don’t know anything firsthand about the Charlotte situation, but over several decades I’ve witnessed how a downfall like this has all too often come to occurred in other communities. Here is a scenario.

  • Individuals with power or money or both, typically business leaders, are able to drown out the voices of people who truly love and value community for its inherent and distinct sense of place by persuading elected officials and community organizations that, in order to be “major-league,” the community needs to build facilities that make it like other communities.

  • Instead of waiting until it can organically warrant facilities, a community falls under the spell of “build it and they will come” and begins to lure major sports teams, major museums and other cultural interests by promoting facilities.

  • Soon the facilities are cannibalizing one another and so often community and business leaders begin to pressure the DMO to table or downsize its community-wide mission and begin focusing on filling only the mega-facilities that have been built.

  • Ultimately, as happened in Charlotte, officials may strap the DMO with responsibilities for operating several of the facilities to further restrict its focus in selected mega-facilities and away from its true mission on behalf of the community as a whole.

  • Still unable to fill the facilities because projections have been over-stated, the DMO then begins to lobby for a “business development fund,” aka “a slush fund” to lure mega-events that nearly always require far more in underwriting than the events generate as a return in local tax dollars needed as a return on investment.

  • Boosters suppress or “neglect to inform” proposals to pursue mega-events with third-party event analysis especially when it is negative and economic impact estimates are careful to direct attention to gross vs. net figures, guaranteed to delight some local businesses, enthusiasts and special interests while primarily blinding local officials and news media to the true return on investment and displacement.

  • As individuals, some officials and special interests begin to “lean” on the DMO to direct business their way or to hire certain people or to contract with certain companies and when or if they refuse, the same or more energy and often money is used to try to get the executive fired.

  • Eventually a suction is created because the “build it and they will come” theory rarely, if ever, works and the slice of mega-events that can be bought dries up or the churn of facilities begins to create a suction as the supply of facilities outpaces any possible demand from visitors or residents.

  • As stress increases or elected and other government officials turn-over, someone protests or posters for the public to distance themselves. A search for a scapegoat begins while others complicit hope the community and the news media will tire of the “story” after a few months or become sated by the sacrifice of a few reputations or or organization so that the co-dependence and dysfunction can resume.

Of course, the answer is for communities to stay focused on leveraging what makes them indigenous and unique vs. carbon copies; and for economic and cultural development interests to stay focused on their job and sober their communities to the lure of so-called “major-league.”

DMOs need to have incredibly strong codes of ethics that that apply to boards of directors, management and staffs alike and insulate them from special interest pressure and discourage ego-marketing. Any focus on events, where they make sense, is best restricted to those that will complement and not displace other visitor segments and that don’t require subsidies.

But the real problem as it is in so much of society is the money in politics that can so easily compromise local interests and surrender community interest to special interests.

Hopefully Charlotte, a great community, learns a lesson and returns to fostering the things that make it distinct and the individuals involved will be redeemed. Hopefully other communities will also take heed and turn more intently to protecting and defending and organically fostering a distinct sense of place.

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